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Strategies & Market Trends : Stochastics -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (134)	2/11/1998 9:40:00 PM
From: Wayners	Respond to of 927

<<Why would a company that's growing over 50% trade with a PE of under 20 ?>> Amazing isn't it? Yet examples of things that you would think are way under or overvalued abound. Why? Because today's market is dominated by momentum players that don't care about fundamentals. In the short run, the fundamentals don't mean anything. It can take literally years for a company's price to correct based on fundamentals. Being a short termer, I've gotten out of the business of looking at fundamentals (except when the next earnings announcement is). I've learned my lesson about bottom fishing on fundamentals on two stocks. Take a look at PARL (Parlux Fragrances) and APM (Applied Magnetics). PARL traded at a P/E of 3 and had fantastic trailing earnings. It even traded below book value. I lost 50% going long on it. APM traded at a P/E of 6 and was estimated by analysts to make $4.00 a share in the upcoming 4 quarters. I lost about 30% going long on that one. Don't make my same mistakes. Learn from them. If you are indeed a short term trader even if you are holding for 1 to 3 months, I'd advise NOT being brainwashed by the latest fundamentals or what people are saying about the company. The only thing you can trust is the chart. Is the price steadily going up or down? Its pretty hard to fake a moving average. Best of luck as always.